Top Performing Israeli Stocks on Wall Street

Investing in Israeli stocks traded on Wall Street is a great way to take advantage of Israel’s growth and to diversify your portfolio. Many investors simply invest in a stock whose name they’ve heard, never checking their options.WMI regularly provides this review of the top performing stocks. You can subscribe to our email updates to get current information on Israeli stocks you can invest in.

August 2010 review

There are over 130 Israeli stocks on Wall Street. These stocks are traded like all other stocks on U.S. stock exchanges, but the company headquarters and management is in Israel. Which one(s) should I invest in? WMI has done the leg work to determine which of these company’s stock performed the best in the past year. For this review, we included only those companies with over $1 billion in market capitalization.

Here are the top price gainers for the year Aug 19, 2009 – Aug 18, 2010. For comparison, we’ve also included the two Israeli Exchange Traded Funds and one Israeli mutual fund on Wall Street, as well as three benchmark indexes. Remember, past performance is no guarantee of future results.

(click to enlarge)

With extraordinary growth (over 110% each) in the past year, VeriFone Systems (PAY) and Perrigo (PRGO) clearly outperformed, by a huge margin, their Israeli peers as well as many stocks on Wall Street and globally. With gains of 11.5%-23.1%, Check Point (CHKP), Savient Pharmaceuticals (SVNT) and Amdocs (DOX) also outperformed the S&P 500 (9.8%) and MSCI World (7.1%) indexes.

The diversified Israel Exchange Traded Fund Aberdeen (ISL) also outperformed these indexes by more than 90%, gaining 18.9% in the past year.

If you had an Israeli investment account in the past year, you would have earned 24.9% by investing in the diversified Tel Aviv 25 index on the Tel Aviv Stock Exchange (comprised of the 25 largest Israeli stocks).

Who are these top performing companies?

VeriFone Systems designs, markets, and services electronic payment solutions that enable secure electronic payments among consumers, merchants, and financial institutions worldwide. This mid-cap stock is rated “Strongly Outperform” by Charles Schwab and “Outperform” by Reuters Research. According to the equity fund Vatea, the industry/sector has a huge growth potential, especially in the BRIC countries (Brazil, Russia, India and China). They like Verifone because of their portfolio of products and more importantly their portfolio of customers. The sector has just three major players, which means there’s enough room for everyone. Verifone is the leader in the USA but they also are the leader in the Swiss and German markets, which are high end. Verifone’s approach–picking only high end customers, high end retailers and high end markets–along with its great potential for market growth should pay off over the long term and distance it from competitors. Gregory Pepin, chief analyst for the Vatea Fund, says, “You also have to take into account their new payment app on the iPhone which opens a new business opportunity for Verifone. It seems the company is moving more and more toward providing solutions for mobile payment through smartphones for example. That market offers amazing growth opportunities.”

Perrigo Company develops, manufactures, and distributes over-the-counter (OTC) and prescription (Rx) pharmaceuticals, nutritional products, active pharmaceutical ingredients (API), and medical diagnostic products worldwide. Rated “Buy” by Ned Davis Research, this growth company recently acquired the rights to private label the allergy drug Allegra and hair loss treatment Rogaine. The financial magazine Barron’s recently stated: “The Perrigo glow may not wear off anytime soon. Even if the economy improves, many consumers are likely to stick with Perrigo products that have proven effective. Some brand-name treatments cost more than $100 apiece. The dollar savings from such products is probably too large to forgo.”

Check Point Software Technologies develops, markets, and supports a range of software, and combined hardware and software products and services for information technology security worldwide. The company offers network and gateway security solutions, including Firewall that inspects traffic as it passes through security gateways; intrusion prevention system (IPS), which monitors the network for malicious or unwanted traffic, as well as detects and blocks known and unknown attacks on the network or system. One of the flagship high tech companies in Israel, it catapulted from $2/share to $106 in 1998-2000. This mid-cap stock is currently rated “Outperform” by Credit Suisse Research and Reuters Research. The company reported strong second-quarter 2010 performance with a 25% year-over-year increase in product and license sales. Growth was strong across all product lines and geographies, although growth in Europe was lower than in other areas. Gross margins climbed about 1 percentage point over the prior-year quarter despite appliance sales accounting for a larger share of the revenue mix. The increasing proportion of appliance sales continues to drive an increase in the number of large deals, with transactions over $50,000 accounting for 58% of total order value in the quarter. The firm has executed very strongly over the past year, with revenue growth benefiting from the acquisition of Nokia’s security business.

Savient Pharmaceuticals is a specialty biopharmaceutical company with one meaningful drug candidate, Krystexxa, for treatment-failure gout, a painful joint and tissue affliction. The company also sells and distributes branded and generic versions of oxandrolone, a drug used to promote weight gain following involuntary weight loss. It sells its products directly to drug wholesalers. This small cap stock is rated “Outperform” by Reuters Research, but “Underperform” by Charles Schwab. While their main drug Krystexxa has only 50,000 potential patients, Savient’s solution stands to get a high portion of this population.

Amdocs, founded in 1982 and having 18,000 employees, is a leading provider of software and services to the communications, media, and entertainment industry service providers worldwide. The company’s software systems support the full span of the customer life cycle, including revenue management, customer management, service and resource management, personalized portal and value-added services, and portfolio management. Amdocs also develops software for telecom directories sales and publishing. Another of Israel’s flagship high tech companies, this mid-cap company is rated “Buy” by Ned Davis Research and “Outperform” by Reuters Research. At the end of the third quarter of fiscal 2010, Amdocs had approximately $1.29 billion of cash and marketable securities and no outstanding debt on its balance sheet compared with $1.17 billion of cash and marketable securities and no outstanding debt at the end of fiscal 2009.

Marvell Technology designs integrated circuits primarily for the data storage, networking, and communications. Historically, the firm focused on storage, where it is still a key supplier to hard disk drive makers. The firm has since diversified and supplies chips to the networking and wireless handset industries. Its Wi-Fi chips are also used in consumer devices and gaming systems to connect users to the Internet. With over 5,000 employees, this large-cap stock is rated “Market Perform” by Charles Schwab, 4 out 5 star rating with Morningstar, and “Outperform” by Reuters Research and Credit Suisse Research. Morningstar indicates: “Marvell has been a high-growth chip maker over the past decade, with leading market share as a supplier to the data storage industry. Although it has several growth opportunities on the horizon, the firm is likely to encounter fierce competition, particularly in non-storage end markets.” Marvell is debt free and ended the year (fiscal 2010) with nearly $1.8 billion of cash on its balance sheet, which is quickly growing quarterly.

Related Articles

It had been my dream to invest in Eretz Israel for a long time, but there are obstacles for a Canadian not living in the Land, and not speaking Hebrew. I finally found Evan Liberman of Wise Money Israel and am ever so grateful for his competent help, his fluency in Hebrew and English, his patience with dealing with all the bureaucracy and issues that come with a North American investing in Israel, but not living in The Land. He is very patient and answers all my questions with great precision. I highly recommend Evan’s service. And, I have made shekels!!!!! If you want me to talk to anyone, I am more than happy to do that.

MCanada

We have had only great experiences with Evan Liberman and Wise Money Israel. Evan is always available for consultation via e-mail and Skype and he has our total trust. He is a very patient man and was able to successfully walk us through the process of investing in Israel. We have known Evan’s parents before knowing Evan and know he comes from a wonderful family and we have absolutely no hesitation recommending his services.

Bernie and MarianneTennessee, U.S.

Evan is extremely knowledgeable about investments in Israel and very patient and easy to work with. If you wish to support Israel by investment, then Evan is an exceedingly reliable and effective way to do so.

GrahamCanada

I have been very happy with the service you provided in the initial set-up and also the quick response to any questions I have had in regard to investing in Israel. I haven’t used any other services that you can provide and I’m sure they would be as thorough and excellent as the ones I did use. Investing in Israel has been a very positive and profitable experience thus far and I would recommend it to anyone. The only drawback I have encountered is that some of the information is in Hebrew and requires some work to get it translated into English. I haven’t had a single problem with my stock trades and find I.B.I. to be very helpful and user friendly. I will definitely continue to invest and trade in Israel.

AronManitoba, Canada

It is a very rewarding experience to do business with Mr. Liberman of WMI because he went over and beyond the call of duty to help me educate myself about investing out of country. I’m glad his company exists to take folk like me through what would have been for me a tedious process of doing the paperwork to invest in Israel. He also introduced me to many pertinent websites that I’m still using as I track my investment that he helped me to locate. His expertise in satisfying the Israeli government that I’m a legitimate investor and not a money launderer was very valuable. I hope to tap into his expertise in the future as well. Much of the confidence I have in Mr. Liberman is due to the fact that he keeps good company. I anticipate learning of other investments through Mr. Liberman.

ChetSouth Carolina, U.S.

You may use my name and number for a good reference to anyone.

Edward and GwenCalifornia, U.S.

Supporting and investing in Israel has always been a goal for my wife and I. Evan has been a pleasure to work with. He has been extremely knowledgeable and helpful every step of the way. We look forward to a long-lasting relationship with Evan and Wise Money Israel.

GregMinnesota

I am grateful to have found Wise Money Israel and worked with them. I never thought about investing abroad, thinking that was only for the extremely wealthy. I wanted to support Israel somehow, and feel our economy is unsustainable as it keeps going deeper in debt. I feel more secure now, knowing that God supports Israel, and seeing how He has already. I know nothing about investing really, and Evan Liberman has gone above and beyond to help me through the process.

R. CoxTennessee, U.S.

Disclaimer

The articles on this website are the opinions of the contributors and should not be taken as financial advice, nor is it a commitment to achieve any future returns. Past performance does not ensure similar future returns. At the time of authorship, the author may or may not hold securities mentioned in the article. This publication does not constitute an offer to purchase, sell or hold securities or units in a fund, and is not a substitute for investment and/or tax advice/marketing that takes into account the special needs of each person. Please consult a professional investment adviser concerning your specific situation before making personal financial decisions.